The Effect of Direct Democratic Institutions on Income Redistribution: Evidence for Switzerland

Lars Feld, Justina A. V. Fischer and Gebhard Kirchgaessner ()
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Gebhard Kirchgaessner: SIAW-HSG, University of St. Gallen, Postal: University of St. Gallen, Bodanstrasse 8, CH-9000 St.Gallen,, Swizterland, and CESifo, Munich, http://www.siaw.unisg.ch
Authors registered in the RePEc Author Service: Gebhard Kirchgässner

No 689, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: There is an intensive dispute in political economics about the impact of institutions on income redistribution. While the main focus is on comparison between different forms of representative democracy, the influence of direct democracy on redistribution has attracted much less attention. In this paper, employing both a composite index and measures of single institutions, we find that direct democracy is particularly associated with lower welfare spending. Moreover, we estimate a model which explains the determinants of achieved redistribution measured by Gini coefficients using panel data provided by the Swiss Federal Tax Office from 1981 to 1997. While our results indicate that less public funds are used to redistribute income and actual redistribution is lower, inequality is not reduced to a lesser extent in direct than in representative democracies for a given initial income distribution.

Keywords: Income Redistribution; Direct Democracy; Referendums; Initiatives (search for similar items in EconPapers)
JEL-codes: D70 D78 H11 H75 I30 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2007-04-30
New Economics Papers: this item is included in nep-cdm, nep-pbe and nep-pol
Note: completely revised version of CESifo working paper No. 1837, published in 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:hastef:0689

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